Re-balance your
portfolio to respond to
market shifts!
The customer
experience is the
Marketing!
Whirlpool Canada LP
Strategic Growth
Channel Strategy Exploration
COMPANY SNAPSHOT
Whirlpool Corporation is a dominant market leader in the home appliance industry, by various measures. Whirlpool enjoys
worldwide revenue of $19 Billion, operates 66 manufacturing and technology research centres and employs 68,000 people
around the world. In Canada, Whirlpool’s annual revenue exceeds $1 Billion, employs 500 people and has a commanding
market share with 8 well known brands, including; Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Inglis, Estate and Roper.
THE QUESTION
With the ‘Law of Large Numbers’ working against them, how can Whirlpool Canada sustain industry leading profitable
growth? How can new channel initiatives achieve additional growth void of conflict and cannibalization of conventional
channel partner success?
Azure Corporation Phone: 905.939.9444 • Toll Free: 1.877.323.7906 |
howcanwehelp@enablingideas.com | www.enablingideas.com
Put an end to status quo
Rotman Information Solutions Phone: 416.978.1912 |
heather.wilson@rotman.utoronto.ca | www.rotman.utoronto.ca/bic/InfoSolutions/infoSolutions.htm
In Canada, Whirlpool’s annual revenue
exceeds $1 Billion, employs 500 people and
has a commanding market share with 8 well
known brands.
FACTS AND FIGURES
THE MARKET ECONOMICS: A large market with manufacturer sales in Canada estimated at $3 Billion (4.8 Million units),
with an average gross margin of 29.5, translating to $4.25 Billion of revenue at retail. A mature, slow growth market
(economic indicators predicting a near-term decline), new growth will not come from market trend but from micro-segment
opportunities, winning competitive share through strategic advantage or new revenue streams from the creation of new
complementary businesses.
DISTRIBUTION CHANNEL / RETAIL MODEL PERFORMANCE: Industry distribution across all channels and regardless of
which channel (i.e. national, regional, independent) is well saturated and largely undifferentiated. Although all channels are
experiencing a performance decline due to cyclical economic factors, power shifts are taking place within the retail models,
with Home Improvement wining share strength and conventional appliance retailers waining.
Winning Channel
Estimated Change
Cause
Nationals
Regional Power Retailers
-9% units decline
- 10% units decline
Gain in Home Improvement retailers
Buying power, scale efficiencies, winning in Premium
Dept Store
Independents
-11% units decline
-11% units decline
Dept store model losing consumers in general
Cost/price disadvantaged, losing in all segments
Winning Model
Estimated Change
Cause
Home Improvement
Natl Electronics
Home Furnishings
-4% units decline
- 6% units decline
-10% units decline
Holding on to Mass, inroads in Premium
Same winning success with Mass / Prem as HI
High margin furn allow competitive pricing with appl
-11% units decline
-11% units decline
-12% units decline
Inability to hold mass segment sales, price compete
Inability to hold mass segment sales, price compete
Dept store model is losing consumers in general
Losing Channel
Losing Model
Appliance Specialty
Independents
Dept Stores
Azure Corporation Phone: 905.939.9444 • Toll Free: 1.877.323.7906 |
howcanwehelp@enablingideas.com | www.enablingideas.com
Put an end to status quo
Rotman Information Solutions Phone: 416.978.1912 |
heather.wilson@rotman.utoronto.ca | www.rotman.utoronto.ca/bic/InfoSolutions/infoSolutions.htm
INSIGHT
Our analysis uncovered an economic profit opportunity within
Whirlpool’s existing distribution assets, requiring no additional
capital investment. By restructuring current levels of
investment from weakening channels / retail models to
strengthening channels / retail models, Whirlpool would
capture implicit growth resulting in an improved ROI.
With largely undifferentiated distribution channels, further
Implicit Economic Growth
Investment Rebalance
Relationship Advantage
Marketing Redistribution
untapped share growth is available by shifting channel
spending to investing in the end-customer relationship (again
an economic redistribution resulting in an improved ROI).
THE SMART ANSWER
Growth can come from only two places; (1) a growing market or (2) winning more from others. Our smart answer was in
uncovering and capitalizing on the hidden opportunity for both.
Investment Rebalance
A distribution structure in economic terms is similar to an investment portfolio. Although you require diversification to have
access to various markets and mitigate risk, as a business asset like any other financial asset, to maximize ROI it is necessary
periodically and systematically to re-balance your portfolio to respond to market shifts. Our strategy validation analysis
unearthed market shifts taking place that created an ROI lift opportunity by re-balancing Whirlpool’s distribution asset
portfolio.
Marketing Redistribution
In an environment where the value chain power is disproportionally held by retailers due to a highly mature and well-saturated
product market, manufacturer ROI is directly proportionate to a customer demand advantage versus competitive and
substitute product choices. Re-framing the marketing model from channel push to demand pull we uncovered an ROI lift
opportunity at the same spend level. Analysis of successful experience-based marketing models demonstrated that through
an integrated strategy when “the customer experience is the Marketing”, demand advantage and in-turn value chain
power and maximum ROI calibrates to the owner of the customer experience.
SERVICES PROVIDED
Senior Leadership Team workshop; Research framing; Facts and data search and assembly; Modelling and analysis; Financial
validation; Business strategy and implementation plan; Marketing activity plan
Azure Corporation Phone: 905.939.9444 • Toll Free: 1.877.323.7906 |
howcanwehelp@enablingideas.com | www.enablingideas.com
Put an end to status quo
Rotman Information Solutions Phone: 416.978.1912 |
heather.wilson@rotman.utoronto.ca | www.rotman.utoronto.ca/bic/InfoSolutions/infoSolutions.htm